← Broker database 2023-07-07
Joseph Civiletti Suspended for Receiving Undisclosed Compensation for Power of Attorney Role
According to FINRA, Joseph Civiletti was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for two months for failing to notify his member firm that he had received compensation for his disclosed outside business activity, acting in contravention of the firm's policy and the limitations it placed on the activity.
While associated with the firm, Civiletti agreed to serve as power of attorney for his mother and father. He disclosed the power of attorney relationship to the firm and stated that he would receive no compensation. The firm approved the relationship as an outside business activity on that basis. Subsequently, Civiletti transferred a total of $30,000 from his parents' firm accounts to his own accounts at the firm. When questioned, Civiletti admitted that the payments were intended to serve as compensation for power of attorney activities he performed on behalf of his parents.
Civiletti also submitted a compliance questionnaire attesting that his outside business activity disclosure remained truthful and complete, which was false. This case illustrates the conflict of interest that arises when representatives serve as power of attorney for their customers, particularly when they receive compensation for that role. Firms must carefully supervise these arrangements to protect vulnerable customers, especially seniors, from potential abuse.